Four Nationwide Reward Checking Accounts That Still Have 4% Yields

I just checked the nationwide reward checking section of DepositAccounts.com, and I noticed these four banks are still offering reward checking accounts that are paying 4% APY on balances of at least $25K as of 5/05/2010. These accounts appear to be still available nationwide.

As we've seen many times over the last year, a rate cut is not the only thing we have to worry about. Banks have often reduced the availability of these accounts. They start out nationwide, but are later restricted to the bank's market area.

The other risk is that the bank will reduce the maximum balance that qualifies for the top rate. For example, two banks on the reward checking table with 4% yields used to have a balance cap of $25K. Evantage Bank reduced the cap to $10K last year. Capital Bank just reduced its cap to $10K in March.

Here's the list of the 4 banks with nationwide reward checking accounts that offer 4.00% APY on balances of at least $25K as of 5/05/2010. Remember that these require that you meet the monthly reward checking requirements. I've also included these accounts in a table at the top of the post which will automatically be updated as rates change. Hopefully, rates will only go up ;-)

ViewPoint Bank - top rate for up to $50K. First post was on May 2008. Note, many readers have reported being rejected in the application process. Update 7/27/10: The account is now limited to Texas residents.

First Bank & Trust (SD) - top rate for up to $25K. First post on their easygrow checking was in July 2009. Update 5/24/10: The bank has started limiting applications to residents of SD, ND, MN, NE and IA.

Do you have a reward checking account at one of these banks? Please share your experience.

You may be able to get a reward checking account with a rate that's higher than 4% if you live in the right area. You can find these at the reward checking table at DepositAccounts.com. Just select the "Filter Account" button at the top of the table, and then select your state under availability.

I recently opened an account with Viewpoint. Yes, the application process is clunky and time consuming but I got through it all. For the higher balance ceiling, definitely worth the extra hoops. The 15 debits per month is a bit more than the others but the other requirements seem normal or perhaps easier (on-line statements, one DD or bill pay per month).

Customer service was very good in explaining everything to me before I signed up (there is a nice chat feature on the website). They give the 4% rate automatically for the first month to give you time to get everything together.

To be honest, given the many stories of rejection, I was surprised that I was approved. I had opened two non-reward checking accounts within the last 90 days so was expecting a rejection.

Another potential danger is that banks can change the number of debit card transactions required. A prime example of all three is Royal Banks of Missouri and their Majestic Checking within the last few months. First then restricted availability from nationwide to state, then increased required number of debit transactions (12 -> 15), and then a month later dropped the rate.

First Security Bank & Trust is now restricted to Iowa and Minnesota only. It was inevitable that they'd give up. They were pretty small, had easy qualifications, and had a solid balance sheet. They do largely farm loans and property -- and since they're located in Iowa, there's only so much deposit influx that they can handle.

First Bank & Trust (SD) is also a smaller bank and has a weaker balance sheet. And Viewpoint is a teaser-only: they cherry-pick customers to avoid signing up yield-chasers.

Essentially, only Danversbank is left. I feel they're the least shaky of the bunch as far as rewards checking accounts go. They're about as large as Viewpoint, when you add in the bank they just bought. They're in a large metropolitan area (they even opened a branch in Boston proper, right on Massachusetts Ave.), and they have a division that does asset-backed commercial lending (so they have an easier time deploying incoming deposits towards loans).

But Danversbank used to be $100K once upon a time, and now they're $25K. So even they have their limits. As more and more banks drop out of the 4%/$25K pool, they might not be able to handle the inevitable onslaught of yield-chasers.